The global economic recovery has broadened and deepened, according to the latest research report by Davy stockbrokers.
Davy’s new quarterly global market strategy report, Alpha Generator, said that strengthening credit conditions, improving revenue prospects and operational leverage are all accelerating a rebound in the global economy.
Chief global strategist with Davy Donal O’Mahony said that confidence in a stabilised global banking system was continuing to build.
“Growth is being restored to all the major regions, with developed economies now playing catch-up to the early movers of the developing world.”
However, Mr O’Mahony noted that Greece’s funding crisis had structurally wounded the euro, effectively blighting the currency’s aspirations to replace the US dollar as the global reserve currency.
“The EU is stumbling to an imperfect solution, with enforced IMF involvement leaving a permanent stain on the euros lofty aspirations as a global reserve currency in waiting,” he said.
The report said that among the challenges facing the euro zone were the “peripheral economies” of Ireland, Portugal, Spain and Greece, which were engaged in “a prolonged and painful process of fiscal retrenchment”.
However, the report said that this was “an unavoidable prerequisite” in order to stabilise public debt dynamics and restore lost competitiveness.